NVS - Immutep: A Worthy $2 Dart Throw

Summary

• Today, we revisit a small cap oncology concern called Immutep Limited for the first time in two years.
• The company is advancing its primary drug candidate on multiple fronts and targeting some significant potential markets.
• An investment analysis follows in the paragraphs below.

"It is easier to start a war than to end it. "? Gabriel Garcia Marquez

Today, we are putting Immutep Limited ( IMMP ) back in the spotlight for the first time since our initial article on this small biopharma name back almost exactly two years ago. We gave Immutep an 'incomplete' at that time but the company has advanced pipeline nicely since then meriting a new analysis which follows below.

Company Overview:

Immutep Limited is headquartered overseas in Sydney, Australia. The company is focused on developing immunotherapeutic products for the treatment of cancer and autoimmune diseases. The stock currently trades right at two bucks a share and sports an approximate market capitalization of $190 million.

The company's developmental efforts are centered around the Lymphocyte Activation Gene-3 or LAG-3. This gene codes a protein, which is involved in the regulation of the immune system. Immutep has more LAG-3-related intellectual property and more product candidates in clinical development than any other firm at the moment according to management. It has been focused on the development effort for over a decade now. Immutep is looking to use the LAG-3 immune control mechanism to boost the immune system with a unique mechanism of action.

It should be noted in March of last year, Bristol-Myers Squibb ( BMY ) announced its anti-LAG3 relatlimab (brand name Opdualag) received FDA approval within a fixed-dose combination with its PD-1 inhibitor Opdivo (nivolumab) in patients aged 12 or over with unresectable or metastatic melanoma. Bristol's leadership has stated they believe Opdualag could eventually see $4 billion in peak sales. Opdualag was the first LAG3 inhibitor to be approved by the FDA. Merck ( MRK ) has a LAG3 inhibitor called favezelimab, which is in late stage development as a combination therapy with its blockbuster PD-1 inhibitor Keytruda to treat colorectal cancer. Many other companies are pursuing this area as well (see below)

The company's lead product candidate is a compound called eftilagimod alpha. Immutep has other candidates in preclinical (IMP761) or earlier stage clinical development (LAG 525 and GSK781) but the potential/progress of eftilagimod alpha will be the main focus of this analysis. LAG525 is in mid-stage development across several indications and is licensed to Novartis ( NVS ) while GSK781 is in earlier stage development and licensed to GlaxoSmithKline ( GSK ) . Immutep owns global rights to eftilagimod alpha except in China.

Eftilagimod alpha is also known as IMP321.

This candidate is a soluble version of the immune checkpoint molecule LAG-3. It is an APC Activator used to increase an immune response to tumors, and is administered by subcutaneous injection.

The company's most critical study right now is called AIPAC. This pivotal Phase IIb clinical trial has fully recruited just over 225 patients for this trial. AIPAC is evaluating eftilagimod alpha in combination with a taxane-based chemotherapy called paclitaxel in patients with hormone receptor positive metastatic breast cancer as an immunotherapy. The goal of this study to see if this combination treatment boosts the immune response against tumor cells compared to the chemotherapy treatment alone. If results are positive from the final read-out of this study data, the company should be able to pursue submission of a Biologic License Application or BLA both in the U.S. and Europe.

In late December after meeting with the FDA, an integrated phase 2/3I trial design was agreed upon that would support the BLA and would also include patients with triple-negative breast cancer or TNBC in the AIPAC study. Phase two of this AIPAC study should commence sometime this quarter.

Immutep is also conducting early stage several trials (TACTI-002, TACTI-003,TACTI-MEL, INSIGHT-004) with Merck and Keytruda as a combination with Eftilagimod alpha to treat various forms of cancer including frontline non-small cell lung cancer (NSCLC). Eftilagimod alpha was granted Fast Track Designation for this indication in October from the FDA in combination with Keytruda. A good description of those studies can be found here . Data from the TACTI-002 study was presented last spring that merited further development in NSCLC.

Analyst Commentary & Balance Sheet:

There has been very little in the way of analyst firm activity on this company over the past half year. Maxim Group maintained its Buy rating and $8 price target on IMMP on November 11th. Ladenburg Research did the same at the end of that month with a $8.30 price target.

The company ended the third quarter with approximately $55 million in cash and marketable securities on its balance sheet against negligible debt. Leadership has stated this provides cash runway through the first half of 2024.

Verdict:

There is a lot to like about Immutep as a speculative investment. The company has multiple ' shots on goal '. It is advancing its primary drug candidate on several fronts and is targeting an intriguing area in regards to LAG3 inhibitor development. It has other LAG3 focused compounds licensed to some big pharma names.

The company is targeting some potentially lucrative markets. Given its small market cap and potential, Immutep could easily be a logical buyout target for a larger name that wanted to expand into the LAG3 development area. The company probably will raise additional capital at some this year. However, it seems worth of a $2 dart throw at least at these trading levels for speculative biotech investors.

"The first casualty when war comes is truth ."? Hiram Johnson

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